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Property Tax Overview and Outlook

Property Tax Overview and Outlook. Hotel Association of North Texas Workshop October 12, 2012. About Popp Hutcheson PLLC. Founded in 1983, PH is the largest Property Tax Law Firm in the U.S.

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Property Tax Overview and Outlook

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  1. Property Tax Overview and Outlook Hotel Association of North Texas Workshop October 12, 2012

  2. About Popp Hutcheson PLLC • Founded in 1983, PH is the largest Property Tax Law Firm in the U.S. • PH combines the knowledge and expertise of our attorneys, appraisers, engineers, and MBA's to provide comprehensive representation for our clients. • PH provides true full service representation: from informal appeals to district court trial • PH specializes in hotel valuation; specifically the valuation approach of removing business value to establish the appropriate taxable value.

  3. Discussion Items • Tax Code Standards and Appeal Calendar • What is Taxable in TX? • How do the North Texas Districts appraise hotels? • How should you Budget Taxes • 2013 “Crystal Ball” Predictions

  4. Property Tax Overview • Distinct Claims in Texas • Market Value • Equal and Uniform • Denial of an exemption • Other • Texas Appeal Process • Deadline May 31st – or 30 days from appraisal notice • Informal Hearing • Appraisal Review Board • District Court

  5. How do the North Texas Districts appraise hotels? Dallas/Denton – using Room Revenue Multiplier • Issues with RRM? • Implied expenses and cap rate the same for all? Collin/Tarrant – using Direct Capitalization Approach • Issues with Direct Cap? • Intangible deductions and allowable expenses

  6. How Should You Budget? Lean on professionals for inside knowledge • Ask about changes in appraisal staff • Ask about changes in models Get your property’s valuation model • Have your professional apply your budget numbers to a realistic model • Make realistic adjustments to model for trends: • Transactions • Cap Rates • Revenues

  7. 2013 Predictions Expect higher valuations across the board • Hotels are one of the most volatile properties • We are moving from of “offensive” appeals to “defensive” appeals • Additional clarity from authorities may help • Appraisal Institute (Intangibles Course) • Source Strategies Brand Report • Trials?

  8. Questions? Mike Shalley 1301 S. Mopac Ste. 430 Austin, TX 78746 mike.shalley@property-tax.com www.property-tax.com

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